With over $8.6M in escrow.com recorded sales, Q4 sets the record as the best quarter ever recorded for 4Ls.
Welcome to the 11th edition of the Liquid Domains Overview (LXDO), which focuses on the 614,928 .com domains we call “liquid”. The objective of the report is to present key statistics and generate a debate amongst the industry stakeholders about the fair value of such domains. We hope you enjoy it and we encourage your feedback and participation for the next reports.
DEVELOPMENT INDEX AND OWNERSHIP DATA
2018 ended with a reversal of trends from Q2 and Q3, with China gaining about 22,500 domains (+3.67%) and controlling about 1/3 of all the liquid domains, especially numerics. Once again, the largest movement in ownership came from domains going from public to private. Private domains now represent 38% of all liquid domains. This is a continued trend from the inception of GDPR in Q2, which caused the number of liquid domains under privacy to almost double in less than one year. 2Ns and 3Ns have the most private registrations with over 50% of each category having masked whois data. We can again observe a correlation between average domain value and number of domains under privacy. The US controls 17% of the liquid domains, while Europe and the rest of the world excluding China, account for 10% combined.
Once again, the most developed categories are 2Ls, followed by 3Ls and 2Cs. The least developed categories are numeric domains led by the 5Ns, followed by 4Ns and the 3Ns.
4Ls .com domains registered a record $8.6M in escrow.com transactions, by far the best result since the publication of this report. The second largest escrow.com domain sales volume belongs to the 3Ls, with almost $5M in transactions; followed by the 4Ns which registered one of their strongest quarters with $2.7M in escrow.com sales. There was no escrow.com data available for 2Ls, 2Ns, 2Cs, and 3Ns, but ShortNames records a disclosed 2 letter .com transaction at $700,000. ShortNames also shows $1M in public 5N transactions, consistent with 2018 sales
The 5th percentile values continue to show single and double digits losses. 5Ns saw the worst performance at -11.63%, followed by the 3Ls at -10.62%. 3Cs also record a signi!cant loss at -7.53%. The notable exception was the 4Ls which appear to have bottomed in the prior quarter. The category registered a 12.37% 5th percentile increase, e”ectively bouncing back from the $100 support level (last quarter the value was $97) and reaching the $109 5th percentile level over 1,800 disclosed transactions. Median prices do not show any signi!cant variation, with the notable exception of 3Cs which show a 61% increase.
Q1 is normally a slow quarter for Liquid Domains due to the reduced activity from China caused by the Chinese New Year. Unless there are large end user transactions, we forecast a slow beginning to 2019. It will be interesting to observe whether the 4 letter’s 5th percentile values will stay above the $100 support or whether they will continue the general declining trend of other liquid categories.
One the worst quarters for 5th percentile values, 3 Letter .coms were the most traded category with over $11M in Escrow.com sales.
Welcome to the 10th edition of the Liquid Domains Overview (LXDO), which focuses on the 614,928 .com domains we call “liquid”. The objective of the report is to present key statistics and generate a debate amongst the industry stakeholders about the fair value of such domains. We hope you enjoy it and we encourage your feedback and participation for the next reports.
DEVELOPMENT INDEX AND OWNERSHIP DATA
The overall development index increased by 1.9%, with signi#cant gains for 2 number and 4 letter .com categories. The most developed categories remain the 2Ls at 34.6%, followed by the 3Ls and 2Cs, both around 28%. With the exception of the 2Ns, the numeric domain categories maintain a development index under 10%. China remains the king of liquid domains, with a 26.4% market share, followed by the US (21.9%), which gained 2% in Q3. Contrary to the previous trend, we noted a negative variation in domains owned by Chinese registrants for the second consecutive quarter. The rest of the world and Europe also lost market share at 11% and 3.2%, which could be attributed to GDPR coming into further e”ect. As a result, private registrations now constitute over 30.7% of all liquid domains, which is nearly a 50% increase since the second quarter of 2018. The 3Ns and 5Ns are the categories with the highest percentage of domains under privacy, with 62% and 58% respectively.
In Q3 the total volume of disclosed sales almost doubled from $5.4M to $9.2M. We also registered a 50% increase in the volume of escrow.com sales, which jumped from $12M to $16.7M. According to escrow.com, the most traded category were the 3L .com domains, with $11.4M in sales, followed by the 4Ls ($3.2M) and the 3Ns ($1.1M). According to ShortNames.com, the disclosed volumes for these categories showed a similar pattern with $5.2M for 3Ls, $1.7M for the 4Ls and almost $1M in 5Ns. Even in Q3, the most traded categories for the number of transactions were the 4Ls (1,713), the 5Ns (1,116) and the 3Cs (596), which registered a record turnover of 2.1%. The positive numbers in terms of volume are in stark contrast with the continued decline across the board in 5th percentile values, which recorded the worst quarter since the inception of our report. 5Ns and 3Cs lost 38%, 4Ls lost 28%. The only stable category were the 3Ls, which registered a modest loss of -2.8%.
The copious inventory released to the market on Q3 had a positive impact on the sales volume but quite a negative impact on the $oor prices, which, with the exception of 3Ls, registered signi#cant double digit losses. The challenge for the last quarter of the year, which is typically a strong quarter for end-user activity, will be if the Western market manages to absorb the inventory being released for sale in China. Strong end user transaction might keep a$oat the most developed categories, however, a potential increase in .com registration prices, to be decided in November, might have a negative long-term impact on the market. Caution is advised.
As GDPR takes effect, Escrow.com reports the lowest volume of sales since the start of LXDO.
Welcome to the 9th edition of the Liquid Domains Overview (LXDO), which focuses on the 614,928 .com domains we call “liquid”. The objective of the report is to present key statistics and generate a debate amongst the industry stakeholders about the fair value of such domains. We hope you enjoy it and we encourage your feedback and participation for the next reports.
DEVELOPMENT INDEX AND OWNERSHIP DATA
Development index fell over 1% to 12.82%, the lowest level ever recorded in our report, signaling a clear downward trend since 2016. The categories that su!ered the most were the numeric domains, in particular, 3Ns, 4Ns, and 5Ns. 2Ns. The letter domains remained relatively stable, with 3Cs being the only category gaining new developments. 3Cs also recorded a small increase in the 5th percentile value (+4%) and a sizable (38%) median price increase in disclosed transactions.
The inception of the GDPR last May brought signi#cant changes to the ownership data. For the #rst time, we recorded a drop in Chinese ownership, coupled with a sharp decrease in the number of domains associated with European registrants (down to 4.6% from 7.4%). This could be easily explained by the new privacy rules a!ecting European owners. The gainers were the “rest of the world” (+4%, from 7.7% to 11.7%), the N/A category and, in small measure, the US, which gained 1%. China remains the largest owner of liquid domains with 165,000 domains associated with Chinese registrants.
In Q2, Escrow.com recorded $12M in transactions, with the strongest categories being the 3Ls ($4.8M) and 4Ls ($4.3M). These values are in line with last quarter and signal a notable growth in the 3Ls category. The largest drop came from the 2Ls .com which did not register any Escrow.com, nor any other public transactions in Q2. ShortNames.com recorded $5.4M in transactions, with the most traded categories being 3Ls, 4Ls, and 5Ns, respectively at $1.4M, $1.6M and $1.3M. The 5th percentage values gave us mixed signals: on one hand 5Ns and 3Ls showed record increases (+56% and +31%), on the other, 4Ls – the category which accounts for 75% of all liquid domains – dropped 13%. The median values of disclosed transactions also recorded very large decreases in almost all categories. This calls for caution in view of the early Q3 results which are indicating sharp valuation drops for Chinese premium 4Ls.
A signi#cant decrease in the wholesale value of Chinese Premium domains might signal that the tide is shifting away from China and back to the West. Chinese owners might start to #nally sell inventory. Once again, we expect Western investors and end users to focus on the most premium liquid domains when looking at buying opportunities: speci#cally, acronyms with Western Premium letters and Keyword domains. We retain our recommendation for investors to focus on quality over quantity.
While 5th percentile values keep declining, Escrow.com reported nearly $20m in transactions in the quarter, suggesting a strong start for domain investors in 2018.
Welcome to the 8th edition of the Liquid Domains Overview (LXDO), which focuses on the 614,928 .com domains we call “liquid”. The objective of the report is to present key statistics and generate a debate amongst the industry stakeholders about the fair value of such domains. We hope you enjoy it and we encourage your feedback and participation for the next reports.
DEVELOPMENT INDEX AND OWNERSHIP DATA
2018 starts with a continuation of the trends observed in our past reports: China continues to gain market share, especially on the 5Ns front where Chinese registrants added almost 4,000 domains, bringing up the total domain count up to almost 200,000 or 32.12% of the total market.
The US also gained 1% of market share, ranking as second behind China with a total of 18.54%. Europe and the rest of the world continued to hold a stable market share of around 7.5%, while domains under privacy grew slightly to 21.67%. There seems to be: 1) a positive correlation between the average domain value and domain privacy, and 2) an inverse correlation between domain privacy and the development index. In other words, the more valuable a domain is, the more likely it is that it will be under privacy if it is not developed. This translates to record privacy numbers for for Tier 1 categories like 2Ns and 3Ns, with nearly 50% of domain names under privacy registration.
The overall development index went down by 0.5%, with 4Ns domains making the biggest negative jump from 15.5% to 11.3%. 2Ls remained the most developed category at 35.95%, followed by the 3Ls (28.46%) and the 2Cs (28.08%). With the exception of 2Ns at 18%, all the other categories register development indexes between 10% to 15%, with 4Ls being the most developed (14.4%) and the 5Ns being the least developed (10%). 3Ns, 4Ns and 3Cs rank somewhere in the middle, respectively at 12.2%, 11.3% and 12.9%.
2Ls .com domains registered a record $6M in escrow.com transactions, by far the best result since the publication of the report. 4Ls kept a consistent $4.8M in turnover, followed by another strong quarter for the 3Ls at $3.5M. 3Ns and 4Ns also posted good quarters, respectively with $2.8M and $1.3M in escrow.com sales. While escrow.com did not record any 2Ns transactions, the other categories (5Ns, 2Cs and 3Cs) posted an aggregate of almost $1M, respectively at $225k, $143k and $562k. The total amount of sales reported by ShortNames.com was $7.7M, with 4,108 transactions and 0.67% turnover.
The negative trends came from 5th percentile values which kept registering double digits losses: 3Ls -21.46%; 5Ns -16.93% and 3Cs -11.11%. 4Ls lost only -3.13%. The positive note came from the median values (not present in our report) which showed significant increases for the 3Ls, 4Ls and 4Ns. This disparity in performance could be interpreted in two ways: 1) the domains sold in Q1 might have been of superior quality compared to last quarter, or 2) the value ranges of liquid domains are starting to polarize again. Lower liquidity in the second tier categories might also play a factor.
The key question for investors is when to buy batches of domain names at floor prices, as opposed to cherry picking ones with the highest end user potential, or selling their existing inventory altogether. The mix of positive signals (high sales volume for valuable categories) and negative signals (constant descent of 5th percentile values for the least valuable categories), can only mean that investors should continue looking at fewer but higher quality domains.